Stock Futures Edge Higher Ahead of GDP Data & Jobless Claims.
U.S. stock futures edged higher ahead of the expected decline in jobless claims and a sharp increase in second-quarter economic growth. Second-quarter GDP is forecasted to come in at a seasonally adjusted annual growth rate of 8.5%. This is more than 2% ahead of the 6.4% growth in the first quarter. Meanwhile, the Labor Department is expected to show a decline in applications for jobless benefits.
As investors have expected, Fed officials left their stance on monetary policy unchanged. Of course, the economy has been making progress. But the Fed indicated that the U.S. economy still needs to make substantial progress on jobs before any form of tapering. “We have some ground to cover on the labor market side,” Powell said. “I think we’re some way away from having had substantial further progress toward the maximum employment goal. I would want to see some strong job numbers.”
Besides a barrack of strong earnings reports, China stepping up to calm investors’ jitters also raised sentiments. Can the stock market make a comeback after a few days of a pullback? Nasdaq futures were in negative territory, falling 0.10% as of 6:02 a.m. ET. Meanwhile, the Dow and S&P 500 futures were in positive territory, rising 0.40% and 0.18% respectively.
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Robinhood (HOOD) Stock Set To Trade Today
Robinhood (NASDAQ: HOOD), the stock trading app, is set to start trading as a public company today. The company emerged as the go-to destination for retail investors earlier this year’s meme stock trading frenzy. Now, it seems like Robinhood is trying to capitalize on retail investors’ keen interest in the likes of GameStop (NYSE: GME) and AMC Entertainment (NYSE: AMC). Recall that these stocks have seen wild swings amid plenty of discussion taking place over on WallStreetBets.
The Silicon Valley startup is allocating more than a third of its shares to its users. Robinhood priced its initial public offering at $38 per piece, at the low end of expectations. This came after the popular trading platform met tepid demand for its highly anticipated debut.
The stock trading platform has surged in popularity and become a central gateway to the stock market for millennials and first-time investors. No doubt, it is certainly one of the most highly anticipated IPO stocks in the stock market today. But some investors prefer to stay on the sidelines for now. This is due to growing concerns over frothy valuation and the risk of regulators cracking down on the company’s business.
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Amazon Reports Earnings After The Closing Bell
Amazon.com (NASDAQ: AMZN) is slated to report its second-quarter fiscal after the market closes today. This quarter will mark the last quarter under which Jeff Bezos was CEO, as Andy Jassy took over the top job earlier this month. It’s no secret that the e-commerce titan has seen its earnings and revenue balloon amid the shift to online commerce and cloud computing, triggered by the COVID-19 pandemic.
When the company reports today, investors will be closely watching Amazon’s financial performance and Jassy’s plans for future growth. The management expects second-quarter operating income to range from $4.5 billion to $8 billion. That compares with $5.8 billion in the previous year period. This outlook takes into account about $1.5 billion of costs related to the pandemic. Wall Street expects second-quarter revenue and earnings per share (EPS) to jump 29% and 19% respectively.
From the earnings report today, investors will also be looking at the revenue generated by Amazon Web Services (AWS), the company’s high-margin cloud computing business. Certainly, AWS may consist of a relatively small share of the company’s overall revenue. But it generates the majority of Amazon’s operating income. The company’s second-quarter revenue will also include sales from its big annual Prime Day event, held in June this year. With AMZN stock trading near its all-time high, could its momentum continue?
Chinese Stocks Rebound As State Media Calms Nerves
Chinese stocks rebounded sharply on Wednesday’s trading. Stocks in China and Hong Kong are following suit today after authorities intensified efforts to calm nerves among stock market participants. Confidence rose further after the Chinese central bank pumped in short-term cash after the crackdown spooked global investors.
The Chinese regulators hastily convened a video conference with investment banks on Wednesday night. From the meeting, it conveyed a message that education policies were not intended to hurt companies in other industries. Judging from Wednesday’s trading, it seems that the media were able to put some of those concerns to rest.
Sure, Wednesday’s meeting had given some reassurance for investors, said Jun Rong Yeap, market strategist at IG Asia Pte. “But whether this is just a temporary reprieve or a longer-term upward trend, the answer still lies in whether Beijing can calm investor nerves about subsequent regulatory clampdowns and the impact on the growth of domestic firms.”
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Big Pharmaceutical Earnings Watch
Big Tech earnings have continued the strong momentum since the start of the week. Admittedly, some major tech companies have warned about a possible slowdown in growth. Nevertheless, most of the earnings reported so far have topped estimates. Some of the notable tech stocks reporting today include Amazon, Pinterest (NYSE: PINS), and Twilio (NYSE: TWLO). Thus far, earnings for the second quarter are shaping up to be very promising indeed. And it could prompt analysts to raise their forecasts.
Major tech names such as Facebook, PayPal (NASDAQ: PYPL), and Qualcomm (NASDAQ: QCOM) have posted results that handily topped estimates. This had added optimism around the forthcoming reports.
Today, we have some major pharmaceutical stocks reporting. They include AstraZeneca (NASDAQ: AZN), Merck (NYSE: MRK), and Gilead (NASDAQ: GILD), just to name a few. There is no doubt that growth concerns remain with the Delta variant continuing to be on the minds of many. But with Pfizer’s (NYSE: PFE) earnings beat on Wednesday, more investors are also readjusting their portfolio to tap on companies that could thrive amid the coronavirus pandemic. With that in mind, many will be keeping an eye on these big pharma stocks today.
